CalPERS OKs Regional Pricing for Health Plans; Goal to Attract, Retain Public Agencies.Business Editors SACRAMENTO, Calif.--(BUSINESS WIRE)--May 19, 2004 The California Public Employees' Retirement System (CalPERS) today adopted a plan to align local agency premiums more closely to regional health care costs. "This is a response to an inequity created within our pool, in which employers in southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, are paying more than they should, while others are paying less than the cost of health care of their regions," said Board President Sean Harrigan. The action by the Board of Administration is designed to attract and retain agencies in Southern California, where market costs are as much as 40 percent lower than in the North. Because of the cost disparity dis·par·i·ty n. pl. dis·par·i·ties 1. The condition or fact of being unequal, as in age, rank, or degree; difference: "narrow the economic disparities among regions and industries" , CalPERS statewide premiums may be higher than rates offered Southern California agencies by commercial insurers. It will affect some 1,100 cities, counties, schools and special districts that account for 38 percent of CalPERS enrollment. The regions include the San Francisco Bay San Francisco Bay, 50 mi (80 km) long and from 3 to 13 mi (4.8–21 km) wide, W Calif.; entered through the Golden Gate, a strait between two peninsulas. Area/Sacramento and adjoining counties; other Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern counties; Los Angeles/Ventura/San Bernardino counties; other Southern California counties; and out-of-state. Agencies in the North will pay more than those in the South, but their rates still will remain in line with that region's cost of health care. The action is also designed to shield them from future premium increases stemming from the departure of southern agencies. Premiums for CalPERS Basic HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, and PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there plans will be priced differently in the five regions to better reflect market costs, but no California region will pay more than 11 percent over the premium for all State members. "Without regional pricing, Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. tells us that 100 predominantly southern agencies and 100,000 enrollees might leave the CalPERS program in 2005 -- raising premiums statewide by as much as 3 percent," said Sid Abrams, Chair of the Health Benefits Committee. "We needed to equitably and reasonably factor in the relative differences between the regions, and this plan does that." The regional pricing scenarios will be part of ongoing negotiations leading to the Board's expected adoption of the 2005 premium package in mid-June. CalPERS and its health plan partners will adjust the pricing plan as needed as needed prn. See prn order. thereafter to reflect changes in regional cost and utilization patterns. CalPERS is the largest purchaser of employee health benefits in California and the third largest in the nation, with 1.2 million enrollees. For more information about CalPERS, please visit www.calpers.ca.gov. |
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